GORDON Brown has produced the most popular budget for 50 years. A Gallop poli for The Daily Telegraph showed 82 per cent believed the budget was "fair", with only 12 per cent disagreeing.
Labour's overall popularity has increased since the election - 61 per cent say they would now vote Labour. While there were no detailed questions which might have shown reservations behind the overall welcome, the political significance of this should not be underestimated.
Brown the conjuror managed to pull the rabbit out of the hat: having said he would stick with Tory spending limits, he then produced extra funding for health and education from reserves. These, together with the promised cut in VAT on fuel and the windfall tax ensured it felt very different to a Tory budget.
Although even by the end of the broadcast notes of caution were beginning to be heard, they barely rose above the applause.
£l billion for education will not reduce class sizes, nor fund the teachers' pay claim. £1.3 billion for school refurbishment over five years will tackle some of the worst problems but still leave decay and disrepair in our schools.
The £1.2 billion for the NHS is not available until next April, and with no autumn spending round, the increase (equivalent to just 2.2 per cent - well below projected inflation) will do nothing to prevent a winter marked by further crises over bed shortages.
Housing crisis
The release to local authorities of £200m capital receipts this year and £700m next, will have to be used for much-needed repairs, not to stem the rising tide of homelessness.
David Fotheringham, principal policy officer of the Chartered Housing Institute, said it would be 'churlish' to criticise increased spending on social housing - but added "We would have liked to see a bit mort - £l billion a year for five years is what we were looking at".
Labour are increasingly looking to the Tory Private Finance Initiative to stave off deeper crises. At first glance, this can seen an innocuous way of meeting the need for increased capital investment without raising taxes. But the apparent short-term savings are countered by the - still unknown -long term costs of servicing private loans for the next 30-60 years. The real impact of these schemes on the unit costs of NHS Trusts has yet to be revealed, but several Trusts have already ditched PFI schemes as too expensive.
In the terms of conventional capitalist wisdom Brown's measures may not do sufficient to take the 'heat' out of the economy - although many working people have hardly begun to feel any warmth at all. The most pernicious aspect of the budget is the one that has so far aroused least adverse comment - the "welfare to work" proposals. The programme remains co-ercive, despite what the TUC says.
Brown has ensured that it will now be down to Bank of England governor Eddie George to make the decisions on interest rates. There can be little doubt that the base rate will go up pretty quickly.
Some believe that 500,000 jobs could be threatened by the soaring pound as interest rates rise. Brown raised £6 billion in taxes for this year and £6.7 billion next - at the lower end of what was felt would be necessary to avoid the dangers of another boom and bust cycle.
The impact of this will be lessened by the release of council capital receipts (mostly from the Tory sale of council housing) and the spending of some proceeds from the windfall tax, which will pump £400 million into the economy this year and £1.9 billion next.
Critics have also focused on where the taxes were raised - the one-off windfall tax and the abolition of tax credits on pension funds will not affect what the City sees as dangerously high levels of consumer spending.
Brown assumes that continued economic growth, together with his tight fiscal measures will produce the stability that will be key to improved performance.
He has reasserted the 'golden rule' of public finances abandoned by the Tories during the recession of the 90s. Over the course of an economic cycle the Labour government will only borrow to invest, and current spending will be met from taxation.
Together with the expected fall in the Public Sector Borrowing Requirement, it seems that he is so far on target to ensuring that Labour is well within the Maastricht criteria for European Monetary Union.
This means Labour will almost certainly be able to decide on political grounds to whether to go into the first round of EMU in 1999.
The most pernicious aspect of the budget is the one that has so far aroused least adverse comment -the "welfare to work" proposals.
The TUC welcomed "the development of active labour market policies... The government's approach to the responsibilities of unemployed people is correct - offering a choice of options marks a break with the coercive policies of the old government".
The TUC make useful comments about people being paid the rate for the job - though this should apparently be established 'creatively. They want to ensure that training programmes should New Labour, new case: but the economics have an old-fashioned capitalist ring to them allow participants to achieve at least NVO level 2 and that child care costs are paid.
While some of this is to be welcomed, it misses the point. Labour may well come up with training programmes that are superior to Tory ones.
They may even assist a small number in securing decent jobs. But the programme remains coercive, despite what the TUC says.
Look at what is happening to disabled people. £200 million is allocated as part of Welfare to Work for training people with disabilities to get jobs.
Within days however Harriet Harman announced an inquiry to curb the £24 billion per anum spent on benefits to the long term sick and disabled.
Targeting supposedly fraudulent claims for incapacity benefit when the existing rules have seen many fail the over-stringent tests and lose all benefits when they also can't meet the requirement for the Job Seekers Allowance is yet another vicious attack on people with disabilities.
A major campaign must be mounted - to prevent more and more people being excluded from society. The numbers that disappeared off the register with the introduction of the hated JSA will pale into insignificance in comparison with what is to COnIC.
Those currently in work have much to lose too. There is still no sign of the promised minimum wage as any guarantee for the lowest paid.
Blair's model is the American example, where claimants have been dragooned into jobs vacated because cheapskate employers have sacked workers to gain state subsidies, while US wages have been dragged down at the bottom end of the labour market.
Unemployment cannot be tackled on the basis of training and subsidies to employers.
The only weapons that can be used effectively are interventionist ones - a massive programme of spending to create useful, properly paid public sector jobs together with nationalisation of private firms.
These are the very measures that Blair's New Labour has set its face so determinedly against.